Yuanta launches Taiwan's first ESG ETF

Taiwan’s first socially responsible exchange-traded fund (ETF) made its debut on the island’s stock exchange last week.

The fund, which tracks local companies that comply with environmental, social and governance (ESG) criteria, was launched by Yuanta Securities Investment Trust Co (Yuanta SITC), Taiwan’s largest ETF manager.

Called the Yuanta FTSE4Good TIP Taiwan ESG ETF, it’s benchmarked against the FTSE4Good TIP Taiwan ESG Index. It was listed on the Taiwan Stock Exchange (TWSE) on August 23.

According to Xav Feng, head of Lipper Asia Pacific Research, ESG investing has become increasingly popular in Taiwan. He expects the Yuanta ETF to be “well received”.

“We believe the Yuanta ETF will make the local ESG market more complete and mature,” Mr. Feng tells Asia Asset Management.

“Yuanta has the leading status in Taiwan’s ETF market, and the company has a successful track record in introducing innovative products,” he says.

The new ETF’s underlying index is compiled by FTSE Russell and Taiwan Index Plus Corp, a TWSE unit.

“The FTSE4Good TIP Taiwan ESG Index is closely correlated with major benchmarks such as the TWSE Taiwan 50 Index and the Taiwan High Dividend Index…The customised index can help investors to meet their short- and long-term asset allocation demand,” Yuanta SITC says in a statement on August 23.

Taipei-based Yuanta SITC had around NT$520 billion (US$16.5 billion) of total assets under management as of June 2019.